The death of funeral plan lead generation, a warning to other markets?

With new rules on commissions and marketing in funeral planning coming into force in July, Is this a warning to other financial services markets? Potentially, says Thomas Brett, Head of Mortgage and Lending at Contact State.  
 
New rules come into force in July 2022 which will mean selling funeral plans will be a regulated process. But this will have far reaching effects on the market as a whole, not just the sale. This will now mean that the marketing and advertising will come under the financial promotions regime which means much more scrutiny.  
 
So how does this all affect lead generation in this space? Put simply, this removes all third-party lead generation from the funeral plan sector. Any external marketing agencies used will have to work under the lead buyers brand, and payment would need to be a monthly holding fee, not a cost per lead model or commission set up.  
 
Many feel that this will eliminate external lead generation practices in this sector, and this certainly feels like the end of lead buying as we know it. Many funeral planning companies have decided not to aim for direct authorisation, with large firms such as Safe Hands Funeral Plans deciding to close it’s doors. Of the 65 providers of funeral plans, only 42 have applied to become directly authorised, and so far, none have been accepted.  
 
But how will this affect the wider financial services markets?  
 
It's clear for all to see, the regulators, particularly the FCA, are starting to focus on financial promotions as a whole. Paul Lewis of Money Box at the BBC had this to say in this Money Marketing article on the 15th March; 
 
“These plans were sold through cold calling and high-pressure sales, which will both be banned from 29 July. The FCA will also ban commission payments to agents who introduce customers. Perhaps a sign of things to come for other financial products”.  
  
So how can other financial services markets avoid the loss of a very important route to market for 1000s of customers? The most important change lead buyers can make is to insist on full oversight of all customer journeys from external lead generators. Accepting terms and then assuming the leads bought are coming through legitimate channels no longer gives the protection to the company or customer that’s needed. There are numerous examples of the regulators clamping down on this and fining the lead buyer for not having this oversight.  
 
An example ruling by the ASA against Flexible Digital Solutions said: “Flexible Digital Solutions Ltd said the ad was run by an affiliate. They said they made it compulsory with all affiliates they worked with that they saw a copy of an ad before it went live, but that did not happen in this case”. 
 
Companies buying leads will need to have full oversight of the customer journey, and data certification will help with that. This will also capture the relevant contact preferences to ensure cold calling doesn’t happen, as the industry looks to rebuild trust in their practices and products.  
 
This feels like the FCA are testing the water on how to regulate lead generation as a whole in financial services, so the time is now, to look to a higher standard of due diligence and oversight to help protect customers, buyers and sellers of leads, and ensure this area of marketing thrives under regulation.  

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